Ed Bramson finally prevails in battle for control of Electra

Activist investor with ‘charisma bypass’ wins seats on private equity group board

Edward Bramson is the founder of Sherborne Investors, which owns 30 per cent of Electra

The Wall Street raider Ed Bramson stormed the palaces of one of the UK’s oldest private equity groups Electra after winning a crunch vote to grant him greater sway over the company.

Shareholders approved a plan to give Mr Bramson and Ian Brindle, a former PwC chairman, two seats on the board, a move which had been strongly resisted by the group. It marks a remarkable victory for Mr Bramson, who was defeated in a similar vote last year in his attempt to gain more control of the company.

Electra’s chairman Roger Yates, who had resisted Mr Bramson’s tilt, resigned from the board immediately after the vote. “It is important now to draw a line under the disagreements on the composition of the board and move forward. I believe that to achieve this, a change in the chairmanship is an important element,” he said.

The former Bank of England rate-setter, Kate Barker, will become Electra’s temporary chairman, replacing Mr Yates. Electra will kick off a search to find a new independent director to take on the role.

Mr Bramson said he was “pleased” with the result. Both sides were locked in discussions about how the board can proceed with its two new members.

Mr Bramson’s investment vehicle Sherborne later said: “The new directors are grateful for the support shown by shareholders and look forward to working together with their board colleagues in undertaking a strategic review to consider all options in order to maximise long-term value for all shareholders.”

The long-running battle between Mr Bramson and Electra’s board, which had descended into a bitter and acrimonious war of words, kept the City interested in recent months due Electra’s long-standing presence in the Square Mile.

The business was a pioneer of private equity investing in the UK and has been listed as an investment trust in London since 1976. It counts the former Jupiter chief executive Edward Bonham Carter among its alumni.

Electra’s fund management arm owns companies such as TGI Fridays and The Original Bowling Company – but Mr Bramson’s election will open up a period of uncertainty for the group given his reputation for ruthless cost cutting and stern management.

Electra was accused by Mr Bramson of paying too much in management fees to the fund unit and underperforming its FTSE 250 benchmark. He also questioned the corporate governance standards at the business, labelling them “deficient”.

The 64-year old British-born tycoon staged a similar coup at another old British fund manager F&C Asset Management in 2011, when he won a vote to kick out its chairman and take control of the board. He subsequently slashed costs by £33m by cutting jobs and other expenses.

Mr Bramson had flown in from New York to attend the annual meeting attended by about 50 people. During a sometimes tense affair, small independent shareholders laid a volley of abuse at the diminutive investor, with one accusing him of having a “charisma bypass” while other institutional investors questioned why Mr Bramson refused to speak at the meeting.

He won the vote by 53.5 per cent to 46.49 per cent on the resolution. Mr Brindle’s nomination won by a similar margin. About 85 per cent of votes were cast, with the fund managers Aviva and Fidelity among the major shareholders backing Mr Bramson and Investec and Brewin Dolphin behind Electra.

Mr Bramson owns nearly 30 per cent of the company through Sherbourne after slowly building his stake from around 20 per cent when he lost a similar vote last year. About 60 per cent of shareholders voted against Mr Bramson back then.

Stripping out Mr Bramson’s shareholding and the withheld votes, about 85 per cent of the shareholder base voted against him this time around.